标题: Debt to capital ratio [打印本页] 作者: meghanjackson 时间: 2011-7-11 19:47 标题: Debt to capital ratio
In chapter 53 total debt to capital ratio is = (LT debt + current liabilities) / total cap. However, in the financial ratio list from the equity book equation #28, current liabilities are excluded from total debt. So which one do we use?
do we include current liabilities as part of total debt or not?
Thanks作者: iteracom 时间: 2011-7-11 19:47
There are two different ratios. Long-Term Debt to Capital and Total Debt to Capital.作者: YAhmed 时间: 2011-7-11 19:47
Oh I see.. but common sense would say to add current liabilities in total debt but not in LT debt.. I guess I'll have to make an effort to remember it's the opposite.
Thanks Chuck!作者: ningning1984 时间: 2011-7-11 19:47
Current liabs should be part of total debt and not LT debt, no? why not? It depends if it's interest bearing debt or not?
canadiananalyst Wrote:
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> Oh I see.. but common sense would say to add
> current liabilities in total debt but not in LT
> debt.. I guess I'll have to make an effort to
> remember it's the opposite.
> Thanks Chuck!作者: Newhuman 时间: 2011-7-11 19:47
yeah thats what i thought, thanks作者: stalkey 时间: 2011-7-11 19:47
well that's what was confusing me.
According to the formula sheet from the CFAI book,
Total debt= The total of interest bearing short therm and long term debt, excluding liabilities such as accrued expenses and accounts payables.
so technically, CL is excluded from TD.
Edited 1 time(s). Last edit at Monday, May 9, 2011 at 04:37PM by canadiananalyst.作者: eoin 时间: 2011-7-11 19:47
thanks canadian & Iginla. So Accounts payable and accrued liabilities are NOT part of total debt since THEY ARE NOT INTEREST BEARING
